Clinton's Familiar Third Rail
The Democratic presidential candidates finally took up the issue of Social Security at their Thursday debate in Davenport, Iowa, and Hillary Clinton showed she still believes the topic is the third rail of American politics (Touch it and die.).
Before the debate, Clinton had taken issue with a comment by Barack Obama -- who was not on stage Thursday -- that everything other than private accounts should be on the table when it comes to assuring the future solvency of Social Security. She said some things should be off the table, in addition to private accounts, among them raising the retirement age or reducing benefits.
PBS's Judy Woodruff, who moderated the AARP-sponsored debate, put the right question to Clinton. "In taking benefit cuts or private accounts off the table, as you have, are you saying, then, that it can be solely solved through higher taxes?"
"No, not at all," Clinton replied.
When Clinton initially took private accounts, benefit cuts and a higher retirement age off the table two weeks ago, I said to a Clinton campaign spokesman that her comments suggested she was leaving higher taxes on the table. "That's not what she said," he replied.
When I said that, if she was being explicit about taking certain things off the table, by implication she was then leaving other things on the table, among them raising taxes. "That's not what she said," he replied again.
Clinton's initial response to Woodruff on Thursday night demonstrated she's not ready to talk seriously yet about one of the biggest issues looming as her Baby Boom generation moves into retirement. What she said in Davenport was: let the economy handle it.
Clinton said the solution is merely to return to the economic prosperity of the 1990s. She noted that when her husband left office, the federal budget was in balance, there were huge projected surpluses and Social Security was estimated to be solvent long enough into the future to give policymakers the luxury of ignoring the problem for a while.
"Let's go back to doing what worked in the '90s to shore up Social Security," she said. "Let's quit taking money from the Social Security trust fund to fund tax cuts for the wealthy and the war in Iraq."
Clinton, of course, has already earmarked some of that Bush tax cut money to pay for her new health care proposal, but put that aside for the moment. While talking about the need to return to fiscal discipline, Clinton has come nowhere close to proposing a fiscal plan that puts the federal budget back into balance. Instead, she is calling for more spending for health care ($100 billion a year), more money to encourage alternative energy sources, more money for education.
Nor is there a way to wave a magic wand over the economy to get back to those golden days of the 1990s (which Clinton referred to, perhaps in a slip of the tongue, as "the first Clinton administration"). Then a series of forces -- including but not limited to government policy -- combined to create a remarkable period of growth. Still, even then, experts were urging policymakers to confront the future solvency problems for Social Security and Medicare.
During Thursday's debate, Joe Biden initially agreed with Clinton about what the Bush administration has done to the federal fiscal picture and the national debt. But as the discussion continued, he challenged her assertion that the economy can solve the problem for Social Security financing.
"I was there in '79 and '83 when we fixed it," Biden said, referring to the last major bipartisan plan to deal with Social Security, which involved changes in both taxes and benefits. "Let's not kid each other," Biden said. "It wasn't just economic growth that did it. It takes some hard decisions sometimes."
It took John Edwards to force Clinton to be more specific about her views on raising Social Security taxes. Both he and Biden suggested that raising the cap on income covered by the payroll tax would generate considerable future revenues and therefore ease the future financing problems.
Edwards offered his own thoughts on how to adjust that cap in a way that would affect people earning more than $200,000 a year. Asked by Woodruff if she agreed, Clinton again appears to hedge. "I want to focus on the fiscal responsibility piece of this," she said. "Before we do anything else, we need to get back to what was working."
"So was that a no?" Edwards asked.
"It's a no," Clinton replied.
That means for now, Clinton has taken off the table not just private accounts, benefit cuts and raising the retirement age, but also some form of raising the cap on payroll taxes.
Clinton has won praise this week for having dealt realistically with health care. Her new plan, while subject to criticism, debate and revision, represents a significant change over what she had proposed during her husband's administration. It was a straightforward attempt to deal with a significant domestic problem.
On Social Security, she gives every indication that she is not yet ready to be so straightforward. She has long espoused fiscal discipline as part of a Democratic economic platform, and she is correct that robust economic growth over a sustained period of time will help ease the program's solvency problems.
But as several of her rivals said on Thursday, and many leading experts long have argued, that alone is not likely to be the entire answer. Confronting that reality may be risky politics for a politician whose supporters skew older rather than younger, which may be why the Clinton who appeared on stage in Davenport sounded so cautious, rather than the voice of experience she claims to be.
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